Jim Yarbrough, Global Intelligence Programme Manager, BSI
In the foreword to BSI’s latest annual Supply Chain Risk Insights Report, published this month, I began by quoting Oscar Wilde, who famously said: “There is only one thing in life worse than being talked about, and that is not being talked about”. In the report, I observe that the global supply chain has nothing to worry about on this score. 2021 was the year that the supply chain finally tipped over into the public consciousness and became headline news all over the world. From semiconductor shortages to missing milkshakes, supply chain issues have been everywhere.
I don’t see this changing in 2022, as we continue to grapple with the ongoing COVID-19 pandemic and the convergence of multiple business challenges across all sectors and all geographies. With this in mind, it’s never been more important to make the right decisions around supply chain management, and the report strives to help organizations do that by sharing our experts’ knowledge. Together, we’ve focused on five themes – and framed five questions – that we believe are fundamental to securing a successful and sustainable supply chain in 2022:
- Understanding our suppliers – Against a backdrop of irreversible climate change and economic uncertainty, what do we really need to know about our suppliers?
- Ensuring sustainability – As regulatory regimes evolve, how do we ensure we make the supply chain decisions that can shape business success and a cleaner, greener planet?
- Addressing the changing world – How do we tackle the key geographic and sector pain points in a changed and changing world?
- Adapting to multiple challenges – How do we adapt to the current convergence of multiple business challenges?
- Unlocking potential opportunities – What are the key emerging trends for 2022 and beyond and how do we unlock the potential they offer?
For any relationship to succeed, it needs to be nurtured. The supply chain journey starts by fully understanding your suppliers – verifying and building trust with them to put genuine partnership right at the heart of your supply chain strategy.
There are two things you need to know. First, will your supplier be a good business partner, open to working together to identify, address and mitigate threats along the supply chain? And second: do they want to grow with you as a good corporate citizen and help you tackle the challenges we all face in 2022 and beyond? If the answers to the above are ‘yes,’ you’re off and running.
Organizations need to be visionary and proactive, embracing change before it is imposed upon them – this is how they can drive competitive advantage. Supplier performance audits are key and organizations must understand that the onus is now on them to ensure that suppliers are managing their business relationships correctly. It’s time to adopt a holistic approach and look beyond traditional supply chain partners, methods and technologies.
When it comes to easing key pain points, organizations need to first identify them, next
establish effective communication between all parties, and then embrace a unified approach. With this in place, collaboration with experts can help address business challenges and deliver better, faster results.
To address the convergence of challenges surrounding us, it’s crucial to fully understand
the interrelated nature of value chains – to establish flexible and scalable frameworks, and to foster a culture that celebrates change rather than fears it.
Against the backdrop of the ongoing COVID-19 pandemic, irreversible climate change, evolving regulatory regimes, and multiple business challenges, organizations need to adapt their supply chains quickly, and in ways they haven’t done previously. Changing consumer behaviour and automation are other key trends to follow closely as businesses seek to apply lessons learned from the COVID-19 pandemic to become more resilient.
Despite the challenges of the last 18 months, it’s been very encouraging to see such tremendous progress in risk management across multiple sectors and geographies. The same companies that are leading the way when it comes to combatting climate change and economic inequality are setting higher standards for all of us by making suppliers and business partners aware of these challenges and actually helping them to address them.
In upcoming blogs, BSI’s supply chain specialists from around the world will further explore our Supply Chain Risk Insights Report and consider the five key questions it raises. I hope their shared insights and recommendations provide a good starting point as your organization plans for the future. 2022 promises to be another momentous year. Let’s tackle it together.